Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Investor Presentation (June 2024)
21 slides from Pathward Financial's investor presentation, Jun 10, 2024
Slide 1: Investor Presentation, Updated June 10, 2024
INVESTOR PRESENTATION UPDATE D JU NE 10 , 2 024
Slide 2: Forward Looking Statements
Pathward Financial, Inc. (Nasdaq: CASH) | June 2024 Investor Presentation2 FORWARD LOOKING STATEMENTS This investor update contains “forward-looking statements” which are made in good faith by Pathward Financial, Inc. (the “Company”) pursuant to the “safe harbor” provisions of the Private Securities
Slide 3: Leading the way to financial access is the heart of our business
Since our founding, we have worked to advance financial inclusion. We seek out diverse partners, including fintechs, affinity groups, government agencies, and other banks and work with them to identify markets where people and businesses are underserved. Our national bank charter, coordination with
Slide 4: Building a diversified company dedicated to financial empowerment
BUILDING A DIVERSIFIED COMPANY DEDICATED TO FINANCIAL EMPOWERMENT FOR INDIVIDUALS AND BUSINESSES 4 1993 Listed on Nasdaq: CASH 2015 / 2016 Entered Tax Services business by acquiring Refund Advantage, SCS, and EPS 2020 Completed sale of Retail Bank division to focus on national banking operations and
Slide 5: Resilient business model in economic cycles
Stable funding via BaaS partner relationships Funding Earns consistent fees from the BaaS business Operates a collateralized lending platform that outperforms in down-cycles Income 5 RESILIENT BUSINESS MODEL IN ECONOMIC CYCLES Pathward Financial, Inc. (Nasdaq: CASH) | June 2024 Investor Presentation
Slide 6: Collaborate with partners to provide innovative BaaS solutions
COLLABORATE WITH PARTNERS TO PROVIDE INNOVATIVE BANKING AS A SERVICE (BAAS) SOLUTIONS 6 Payment Solutions Issuing Solutions Credit Solutions Tax Solutions Solutions for Financial Institutions Accepting and processing payments through highspeed banking rails A leading debit and prepaid card issuer ho
Slide 7: Commercial Finance helps businesses access needed funds
7 Commercial Finance Helps Businesses Access Needed Funds Through Various Solutions Working Capital Finance Equipment Finance Structured Finance Insurance Premium Finance Ready cash for liquidity needs to new or growing companies in cyclical or seasonal industries Providing access to equipment finan
Slide 8: Investment Highlights
RECORD OF STRONG EARNINGS GROWTH AND PROFITABILITY ABOVE BANKING INDUSTRY AVERAGES EXCESS CAPITAL GENERATING BUSINESS ENABLES ONGOING RETURN OF VALUE TO SHAREHOLDERS INVESTMENT HIGHLIGHTS 2 3 4 1 5 EXPERIENCED LEADER IN FAST-GROWING BANKING AS A SERVICE (BAAS) SECTOR, WITH DIVERSIFIED PORTFOLIO OF H
Slide 9: Record of strong earnings growth
RECORD OF STRONG EARNINGS GROWTH 9 1 2 3 4 5 Earnings Per Common Share Earnings inclusive of extraordinary items In fiscal year 2022, the company sold its Meta names and trademarks and completed a Company rebrand. Adjustments to earnings in fiscal year 2022 include the revenue from the sale, expense
Slide 10: Profitability above banking industry averages
PROFITABILITY ABOVE BANKING INDUSTRY AVERAGES 10 1 2 3 4 5 • Peer data includes commercial insured banks with assets between $3-10 billion. Return on average assets and net interest margin information gathered from the Federal Financial Institutions Examination Council database. • Fiscal Year 2022 r
Slide 11: Ongoing return of capital
TRACK RECORD OF STRONG EARNINGS GROWTH AND RIGHT-SIZED BALANCE SHEET ENABLES ONGOING RETURN OF CAPITAL 11 1 2 3 4 5 $590.0M TOTAL SHARE REPURCHASES 2Q19 TO 2Q24 $33.3M TOTAL DIVIDENDS PAID 2Q19 TO 2Q24 Note: Repurchased common shares include shares withheld to cover income taxes owed by participants
Slide 12: Leader in fast-growing BaaS sector
LEADER IN FAST-GROWING BAAS SECTOR 12 1 2 3 4 5 ~$2.5 Billion Moved daily in ACH and wire services >$10 Billion Moved since start of MasterCard Send and Visa Direct programs in 2020 ~280,000 ATMs Sponsored nationwide Top 50 NACHA – Top 50 ACH Originator and Receiver (#18 and #27, April 2023) >11,000
Slide 13: Pathward serves as a hub of the BaaS ecosystem
PATHWARD SERVES AS A HUB OF THE BAAS ECOSYSTEM 13 1 2 3 4 5 Fed / Settlement ATM Sponsorship 80+ ISOs Processor Acquiring 25+ Processor Issuing ~20 FinTech / Program Manager Partners 65+ Financial Institution Clients 1,100+ Debit/Credit Networks 14 End User Card Holder / Consumer End User Merchants
Slide 14: Commercial finance: working capital, equipment, structured, insurance premium finance
Working Capital Finance • Provides working capital for companies to meet short-term operational requirements • Primarily variable rate loans with majority of floors at or above 6% • Bank typically has dominion of funds • Heavily collateral-managed • Historically excels during economic downturns Equi
Slide 15: Produces stable annual net charge-off rates
…PRODUCES STABLE ANNUAL NET CHARGE-OFF RATES 15 Fiscal Year End Commercial Finance Loan Balances ($ in millions) $126 $113 $92 $140 $158 $207 $324 $368 $414 $474 $591 $665 $858 $1,510 $1,916 $2,308 $2,725 $3,024 $3,723 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 0 500 1,000 1,500 2,000 2,500 3,000 3
Slide 16: Well-developed risk mitigation and compliance capabilities
WELL-DEVELOPED RISK MITIGATION AND COMPLIANCE CAPABILITIES 16 1 2 3 4 5 Enterprise Risk Management Our Enterprise Risk Management (ERM) program applies corporate governance to risk-taking activities. The ERM program sets strategy across the enterprise and works closely with the lines of business to
Slide 17: Appendix
APPENDIX Pathward Financial, Inc. (Nasdaq: CASH) | June 2024 Investor Presentation
Slide 18: Non-GAAP Reconciliation
18 Adjusted Net Income and Adjusted Earnings Per Share Fiscal Year ($ in thousands, except per share data) 2022 2023 Net income - GAAP 156,386 163,615 Less: Gain on sale of trademarks 50,000 10,000 Less: Loss on disposal of certain mobile generators - (1,993) Add: Accelerated depreciation on certain
Slide 19: Pathward's Balance Sheet
19 PATHWARD’S BALANCE SHEET BaaS deposits fund Pathward’s earning asset portfolio while delivering ample fee income Pathward’s commitment to maintain the size of its balance sheet enables the return of capital to shareholders Assets Liabilities Shareholders’ Equity Earning Assets Loans & Leases Secu
Slide 20: Industry Terms
Industry Terms 20 Types of Payment Cards Banking-as-a-Service (BaaS): Providing financial services and solutions to third parties to offer through their distribution channels. Push-to-debit: The ability to move money directly to an end user. At Pathward, our push-to-debit capabilities are called “Fa
Slide 21: Asset-Based Lending and financing terms
21 Asset-Based Lending: Asset-Based Lending (ABL) refers to business loans that are secured based on assets as collateral, generally accounts receivable, inventory, equipment or other balance sheet assets. Accounts Receivable: Accounts Receivable (A/R) financing refers to financing based on the valu
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